Graham Mackay on the global beer industry

SABMiller head Graham Mackay had a major interview in The Times yesterday. This is the man who told us the craft beer surge would fade: "It's inevitable." And after almost every beer blogger and beer website forum denizen had at him, he passed from their consciousness. He's big beer, after all.

Mackay is one of the brightest people in the business, a business that is filled with very bright people, especially at the top. I found the interview -- including a casually tossed-off T.S. Eliot quote -- fascinating.

Especially this, about the global consolidation of the beer market. I've marked the parts I find particularly interesting.

Two decades later the globalised market now looks like a two-horse race, with Anheuser-Busch Inbev leading SAB Miller, and Heineken and Carlsberg trailing behind. Many have made fortunes - the only real doubt is whether consumers have benefited.
Mackay is adamant they have. "It's resulted in better-quality products and more choice. People talk about the dead hand of globalised brand uniformity, but I don't think that's true in beer. Stonking great global brands haven't worked. Heineken is the most global brand and that's under 25% of its owner's volumes." [Bear in mind: despite having a number of large brands, neither SABMiller nor ABIB have a single dominant brand.]
And now, he predicts, consolidation will slow as the key players circle each other. "What stops the biggest groups consolidating is the desire of their owners. Most are in family hands. We are unusual in having an open share register."

That said, Mackay politely refused significant comment on whether SABMiller was interested in buying FEMSA, which is clearly up for acquisition. A guy's got to keep his hand in, after all.

What's it mean? Is Mackay right, is global consolidation about over? Not quite, with substantial pieces like FEMSA and Grupo Modelo still on the board and likely available, but close. As he says, major players like Carlsberg and Heineken are not very likely to be bought because of their ownership. Where to go from here?

Sunday Sales Laws and why they are still around

I see a press release from the TPSA (and that's not the Technology Service Professionals Association, or The Pesticide Stewardship Alliance, or Telekomunikacja Polska SA; in this case it's the Texas Package Store Association, the lobbying arm of Texas liquor store owners) today in a clipping service I subscribe to (it's funny; go to TPSA's website, (this link has been taken off the TPSA website, and they don't appear to have a copy of their own press release on their site...) and you'll see the press release quoted as "the full article featured in Mark Brown's Industry News Update"; guys, you sent in the press release, and it's a clipping service, so that's not a featured article).

Sorry about that huge sentence; I had a lot to say. The release is calling DISCUS out for their claims for the advent of Sunday sales in Colorado liquor stores. DISCUS, the Distilled Spirits Council of the U.S., is the industry group for American distillers and spirits marketers, and they've been doing a lot of work, successfully, on prying the dead hand of 'blue laws' off American spirits sales. They're claiming that an increase of $2 million in booze tax revenues in Colorado is related to that state allowing Sunday sales at liquor stores.

The TPSA is saying that it's just not so, and gives several responses: it's not really spirits taxes, they can't say that it's due to Sunday sales, taxes are actually down, taxes overall are up, it's up less than DISCUS said it would be...they really loaded up the blunderbuss and let fly with everything they had.

I'm not here to comment on whether DISCUS is right or not.* I'd just like to look at why the TPSA is so dead-set against what would appear to be something they'd want; the ability to open on Sundays, to get out from under a law that requires them to close their stores one day a week. Would Target be in favor of such a law? Would supermarkets or convenience stores? Gas stations, restaurants, shopping malls: would any business be in favor of such a law? Hard to believe, but liquor stores are. At least, some of them, and not just in Texas.

What's up with that? Well, folks, it's because liquor stores get to be closed for a day -- no expenses, no employees to pay, none of those annoying customers to worry about -- without having to worry about their competitors being open and doing the business they could, because all liquor stores are required to be closed. Whew. Lock it up, let's go fishing (but first, let's buy sammiches at the Acme store, gas up at Wawa, and pick up some new lures at Bass Pro; they're all open on Sunday).

They'll wrap it up in "think of the children" bullshit, like they're somehow doing God's work by not making alcohol more available (and then usually turn around and also say that being open an extra day makes no difference in sales; not long on logic, these groups, they depend more on firing out everything they can think of regardless of how internally contradictory it may be). That's when they really make me nuts: if you're doing such a wonderful thing by making alcohol less available, why don't you just close your damned store and do the community a real service?

Sunday sale restrictions, control state rules, the case law, ABV beer caps, even licensing laws are all anti-consumer laws. They are either about money, or paternalistic state control. I'd like to put them all in one big pile and dynamite them to hell.


*DISCUS chief economist David Ozgo challenged their math: "The TPSA should get a new economist. Purposefully or not, TPSA looked at a single month of liquor sales in July 2008 and compared it to a different single month - August 2009 - and subtracted the difference. They conveniently failed to take into account the effect from a full year of sales." From Wine & Spirits Daily

Philadelphia Brewing Holiday Party

There's been a holiday party at the big old brewery in Kensington every year Yards moved in, and now that it's Philadelphia Brewing, the tradition has not changed. Here's the deal:

The festivities will be from 2 o'clock - 5 o'clock on Saturday November 28th. Santa will be here along with Delco Nightingale playing classic Christmas favorites and DJ DNA. We will also be debuting our new Winter Ale! In the spirit of the season we will be asking for donations for Flat Iron Wildcats - $$, cat food, fleece blankets, etc.

Good times, folks.

Pittsburgh Postscript

The Pittsburgh trip I'm telling you about -- Red Star, Church, East End, Full Pint, an' 'at -- is, of course, not complete. It's because there are two huge holes in it: Iron City and Penn.

I stopped and stared at the big, silent Iron City brewery Wednesday morning when I was visiting Church Brew Works: the huge graphics coming off the walls, the little sign still saying "Beer Gear Shop." The silence. The cold breeze with none of the huge smell of malt.

When I came off I-279 onto E. Ohio Street Tuesday afternoon, I looked over to Penn, saw the tower, and it hurt to know there was no point in driving over there. No more gleaming brewery, no more schnitzel (no more turkey sandwiches, Sir), no more aromatic glassfuls of Dark. No more gemütlichkeit.

I talked it with a knowledgeable insider who requested anonymity. "You tell me," he said. "How do you kill a successful business, a successful brand, that fast?" Indeed, I said; with Iron City it took repeated cycles of criminal management -- literally (pretty good summation of the whole story, only a couple small errors) -- to do it. We laughed softly, ruefully.

Iron City is being brewed at Latrobe, Penn is being brewed at The Lion. I haven't had any of the 'new' Penn, but I did have a bottle of Latrobe-brewed Iron City. I drink Iron every time I visit Pittsburgh, just something I do, and to me, this tasted just like it always has. But in both cases, it doesn't really matter whether the beers are accurate renditions of what the beers used to be. What matters is what their regular drinkers think, and it's already clear that they are not pre-disposed to think they're the same.

Will something be worked out to return Penn to the brewery, or to a new brewery in Pittsburgh? There was an article in the Tribune while I was out, how Tom Pastorius was trying to round up money and investors to put a deal together...but I don't give it much of a chance. Don't get me wrong: I hope for the best, my fingers are crossed, and if it were to be done -- and done right -- it would have to be with Tom. I cannot imagine his despair in watching the crowning accomplishment of his life crumble and fail, just as I cannot imagine anyone else being able to successfully revive Penn. But there are just too many things against it right now.

If the brewing of Penn does not return to Pittsburgh soon -- and I have no idea how that might happen -- the brand will disappear. Iron City? I'm afraid there is nothing that can save the brand at this point. A terrible waste of heritage -- in both cases -- a terrible waste of years of hard work, a terrible waste of potential.

Hard thoughts on a Saturday morning. I grieve, truly.

Maybe I'm burying Penn too soon. Thanks to a reader for this link to a story in today's Trib; the Urban Redevelopment Authority has authorized a $300,000 loan to Pastorius and his partners. Good news, and while the bottling line is gone, the brewhouse is still intact (I'd thought it was gone, and that's a big plus). But...they still have to buy the business back from Birchmere Capital, and then successfully buy or lease the building again, and that's not going to be easy at all. My fingers are still crossed.

Whirlwind Tour Part 2 of 3 -- Wednesday

Picking up where I left off...

Wednesday morning I had another great breakfast at Pamela's (what can I say; it was close, it was delicious, it was reasonable, and it was served quickly) and made the short drive to Church Brew Works. Sean Casey was up on the roof -- literally, they're having the roof repaired, and he was up taking pix, some great ones of him sipping tripel with the skyline behind him -- while I was running the taps with brewer Brandt Dubovick. Excellent overall quality.

Then they took me downstairs: Church is seriously gearing up for production: more and bigger tanks (Sean seems to be collecting tanks), new bottling line, new six-pack holders (not sure why they're not buying kegs; "Draft drives bottles" is an industry truism). As Sean said when I left, "Thanks for visiting Pittsburgh's biggest production brewery!" Kind of shocking thought, but as of right now, he's right.

After that, I took it up the hill and down through my old Shadyside neighborhood to East End Brewing, where Scott and Brendan were hustling to get ready for some bottling. Scott showed me the new tasting area -- right inside the door! How's that for convenient? -- and we tasted some beers, and talked about what a hard worker Brendan was. Beer tasted pretty damned good, BTW.

Running about an hour behind, now, as I kept missing the turns my GPS advised (a combination of really loud music -- it was too nice a day not to -- and the GPS being terribly confused by Pittsburgh streets -- nice to know it affects machines, too), but I did finally make it to Rivertowne Pourhouse, where I was soon drinking samples with a very relaxed crew of brewers: Barrett Goddard, Andrew Maxwell, and Sean Hallisey, along with Mark Kegg, their partner (along with North Country brewer Sean McIntyre) in Full Pint Brewing. We worked our way through the lineup -- real good, even the damned fruit beers -- and started playing around, like the world's smallest black'n'tan you see to the right (note the sugar packet for scale). Full Pint is just waiting on a Dec. 1st zoning meeting, and they're so ready to go they might just head over after the meeting -- assuming it goes well, and they think it will -- and start brewing. Four of their own beers, and two each from Rivertowne and North Country, and yes, they're talking about doing a variety case with 8 beers from each of the three different breweries. How's that?

I finally walked out into the drizzle that was now falling lightly, and headed down to Hofbräuhaus. It wasn't an official visit, I just wanted to go again, in the daylight. Got a half-liter of Dunkel -- very nice -- and a bowl of cabbage and hax'n soup -- also nice, thick, if a bit salty -- and the oft-recommended sauerkraut balls, which were actually a big disappointment: mostly just doughy. Great place, great beer, amazing view of the river, but...where does one park, particularly when 'one' is the 600+ people this place can seat? There is no garage, there is no lot. I honestly can't believe this was approved. I'm all for the place, it's done well, but who planned this parking? No transit either, other than buses over on Carson Street and the rare Pittsburgh taxi. I don't get it...

Anyway, then I went to Bocktown Beer & Grill, where I had an event. Bocktown's a great little place; Chris gets some seriously rare and delicious beers in, and her new chef is just rocking it, we had excellent pairings for the barrel-aged beers we tasted. I got to talk a lot about whiskey, which is always a pleasure, and then we talked far into the evening. I finally, reluctantly, dragged my carcass down the hill to the hotel, and pretty much collapsed, exhausted, into bed.

Whew. That was a lot. I'll wrap up Thursday -- Rock Bottom Homestead, Marzoni's, and Otto's -- in a final post.

Whirlwind Tour of a whirlwind tour -- Monday and Tuesday

Here's what I did the past four days.

Monday -- Visited Roy-Pitz Brewing in Chambersburg. Ryan and Jesse's brewery looks like something from the early 1990s -- in a basement, lots of used equipment, hand-written signs -- but the beer's better than that. Everything but the Gobbler Lager was pretty good stuff (the Lager had suffered from a production problem and was borderline). Not crazed hopheads, and having more success in Chambersburg -- a craft black hole almost as bad as south Jersey -- than the last hometown brewer, the late lamented Arrowhead (please, don't anyone tell the state how far out of date their tourism website is; Arrowhead closed in 1997!).

Up over the mountains on Rt. 30 (whee!), then on into Greensburg to visit Red Star, now the Red Star Agave Grill (which was a bear to get to, thanks to downtown construction). Whatever. It looked pretty much the same as ever, and the menu, while sporting a few Mexicanish items, seemed pretty eclectic overall. The beer showed no agave influence, thank God, and I'm here to tell you that the Canvasback nitro pale ale still rocks, and Jeff Guidos definitely knows how to make a barleywine.

Stopped at a Primanti Bros. for a sweet sausage sammich to get something in my belly: believe me, that's a great way to do it. On to Latrobe to City Brewing, the old Latrobe Brewing. A few changes here -- the offices and Rolling Rock Museum are closed, it's not quite as busy, some of the cheesier automation has been removed -- but it looked largely the same as before. Except, of course, no more fleets of green silk-screened bottles. They're making Iron City here now (and Southampton's 12 oz. beers, and they taste fine).

Down into Pittsburgh for a presentation on the North Side at the Teutonia Männerchor hall for Vecenie Distributing. I talked to a bunch of bar and distributor owners about craft beers -- told them how craft is missing a great opportunity by not making more helles/kölsch-type beers for the mainstreamers who want to buy local -- and answered questions, then went to my hotel for the night.

Up early the next morning for breakfast at Pamela's P&G in the Strip, then I headed north at high speed. Stopped at Voodoo Brewing (not open; Matt Allyn had told me the night before he wouldn't be able to meet me, but I wanted to see the place; looked much the same) then buzzed over the hills to Blue Canoe, the old Four Sons, where Justin Dudek was brewing and took me through the taps. Pretty much uniformly good, and I was pleased and surprised to see "Dead Tony's Trippel" still on the menu, an old Four Sons' standard. Menu looked fantastic, by the way. I'll be back to this at some point.

Another "I'll be back" is Sprague Farm & Brew Works, where I went next. Brian and Minnie's beers were at least good -- the Hellbender Porter is still very good -- and the "pub" they've made out of the property's barn is just fantastic. Brian told me this is where the cool folks in the county hang out, and I have no reason to think he's kidding; I'd hang out there if I could. Awesome, all the way from the high bowed roof and the "beer hall" (which is just that; a hall where you can drink beer) to the milk bottle beer glasses. I'm thinking about celebrating here when I finish the manuscript.

Back in the Jetta and down to Pittsburgh, where I was "teaching" Craft Beer School with Tony Knipling of Vecenie Distributing and Scott Smith of East End Brewing: the topic was Session Beers. I realized I had just time enough to pick off one bar on my list to visit, and I picked brillobox; glad I did, too. Pretty little place, and I had a nice glass of Bell's Two Hearted, always a good choice.

Craft Beer School went great; something around 190 people, all very interested and having a lot of fun, and asking some good questions. Tony and Scott and I went to Six Penn for a beer after; nice place, an upscale eatery from the Eat'n'Park people. Then I caught a gypsy cab over to Hofbräuhaus to hook up with Brian O'Reilly, as semi-detailed here. Kind of. I was really tired and a bit over-served when I wrote that, and I fell asleep during the last paragraph. Glad you can edit in Blogger.

Gotta get back to work; I'll get you the rest of the trip shortly, and I still want to post about my recent trip to Yuengling.

5 more Giant Eagles cleared for licensed beer sales in western PA

The beat goes on. Looks like the supermarket beer sale genie is loose, and no one is going to be able to put it back in. Whether Sheetz will be able to overcome the irrational prejudice against selling beer at a gas station or not remains to be seen (what is the issue: you drive to bars, distributors, State Stores...is it something about gasoline fumes that makes you helpless against the insane urge to drink while driving?!!!). Meanwhile, PA consumers are getting a tiny little taste...of normalcy. I challenge anyone to give me a good reason that supermarket beer sales are bad for consumers.

It's late, and I'm tired

Just wanted to let you know why I haven't been blogging recently. Over the weekend I was helping my mother-in-law move out of the home my wife's family lived in for over 40 years (and helping finish off a sixtel of Victory Sunrise Weiss), and there was no Internet connectivity. Monday morning I left at 6 AM for Pittsburgh, visiting Roy-Pitz Brewing, Red Star, and City Brewing on the way to an event at the Teutonia Mannerchor in the evening.

I got in late, and slept till this morning, when I had an excellent breakfast at Pamela's diner (Tex-Mex omelette) and headed up I-79 to Voodoo Brewery, Blue Canoe brewpub, and Sprague Farm & Brew Works. Then I came back down I-79 to an event at the Cultural Trust (taking a quick detour to BrilloBox first, very nice), a session beer session at Beer School. Following that I had a beer at Six Penn Kitchen with Tony Knipling, beer-guy supreme from Vecenie Distributing, and Scott Smith, everything-guy at East End Brewing. We toasted a good situation, and wrapped 'em.

Then I cabbed over to Hofbrauhaus to drink with Sly Fox brewer Brian O'Reilly, his boss John Giannopoulos, and some local beer people they were with. The Dunkel I had was good, but we couldn't stay; the staff told us that the power was being cut off for maintenance (!). We drifted down to the Double-Wide Grille, and to Fat Head's, where I argued that a woman with plenty of beer to choose from will try the varieties. I'm not sure why, by that point. We called it a night, and I came back here. Tomorrow I'll be visiting breweries here in Pittsburgh: Church, East End, Rivertowne Pourhouse, and back to Hofbrau.

More on Full Pint Brewing

Much more detail on the planned Full Pint Brewing in the Pittsburgh Business Times. Ambitious plans, but some excellent brewers and experienced businessmen; good chance of success. Thanks to Jeff "Craft Beer Radio" Bearer for the link.

Comment verification now in place

The comment spam has continued to be a problem, so I've turned on the verification. It's a pain, I know, but plenty of other blogs have it, and I'd just as soon not deal with the spam. Especially this comment spam. (Believe it or not, since I put this in place, I've had someone try to spam-by-hand my post on my dad's pancreatic cancer with a 'I can sell you vicodin on-line' crapshoot. That's really low, like human-garbage low.)

Carry on.